Yesterday, Cornerstone Therapeutics, Inc. (NASDAQ:CRTX) stock turned 6.79% back, on exceeding the average for the company trading volume.
This was the first significant pullback of CRTX shares for this month. After the hot news, the time for a price correction has come.
Since the beginning of the month, CRTX stock has been climbing up with sweeping steps.
Last Tuesday, CRTX licensed to Targacept, Inc. the worldwide rights to develop and commercialize the products, targeting the alpha-7 receptor. The technology used, was originally licensed to CRTX by the Feinstein Institute for Medical Research.
According to the agreement, CRTX will receive an upfront payment of $1.5 million and is eligible for success-based milestone payments of up to $74.9 million, depending on which of the two specified lead compounds Targacept makes progress on. The company will also receive single digit royalties on any future net sales of the products based on the licensed technology.
The above announcement opened the door for CRTX stock rush, which got on the list of the stocks with the highest percentage increases.
Two days after these positive events, CRTX released its financial results for the second quarter of this year.
The company reported 14% higher net revenues as compared to the three months ended June 30, 2009, whereby the percentage of revenues derived from strategic specialty products increased from 20% to 64%.
The most significant improvement is in the company’s cash balance. CRTX presented a $27.6 million increase in the cash and cash equivalents during the first six months of the year, or 146% up from $18.8 million to $46.4 million. The progress in the operations also finally confirmed a possible further upward direction for CRTX stock.
Though, a more profound reading of the company’s financials shows that for the six months ended this year, CRTX’s net income per diluted share decreased to $0.18 from $0.60 per share last year. That seems to have cooled down the initial investor enthusiasm.[BANNER]
The company also reported $10.8 million of deferred revenue. The amount relates to CRTX sales, for which the future returns could not be reasonably estimated at the time of the sale.
Since the date of above mentioned firsts announcement, CRTX stock surged 14%. Yesterday, the disclosure of a CRTX stock promotion, for which the promoter announced to have received 2,000 shares of CRTX at an average price of $6.23, reminded that the time for a price correction has come. CRTX stock closed the session at $6.45 per share, which was far away from the previous day high at $6.99. Investors remained unwilling to overcome the psychological limit of $7 for CRTX stock.
